Imagine a world where you make sweets and cakes. Almost all your competitors make similar sweets and cakes, but you’re doing well because your cakes are awesome.
In this world, you and your fellow pastry chefs in the market rely on the same type of chocolate. One company controls a huge percentage of this high-quality chocolate supply. Everyone complains that the company is too big and powerful, but they still buy it because the chocolate is good and cheaper than everyone else’s.
Suddenly, with much fanfare and public outcry, people consider chocolate harmful to public health. It’s not like chocolate won’t exist. People still make it and consume it. But the biggest chocolate distributors, including this huge supplier, are saying, “No more chocolate!”
Are you changing your business model and products to fit the new world? Or are you turning into a chocolate outlaw?
Before you decide, the big chocolate purveyor says: “We’re going to make something that is just like chocolate but without any of the dangerous things the public is concerned about. Trust us. And you can only get this new chocolate from us.”
Does this affect your choice of business? Do you think the chocolate supplier might be taking advantage of the situation?
Well, that’s where third-party cookie publishers and advertisers are today. In response to privacy concerns, Google stops supporting third-party cookies. But it also has a “new” version that it says you’ll want. However, you still have no idea what’s going on in that new bite.
Who knows what the right answer is? CMI Chief Strategy Advisor Robert Rose has some ideas. Watch this video or read his opinion.
The history of third-party cookies
We’ve covered the idea of privacy and opting out of third-party cookies a few times on this channel. But recent developments may have you saying, “I just don’t get it. Are third-party cookies removed? Will anything change? I have to do something;”
The answer is yes.
So that you don’t let the many buzzwords, technical issues, and double entendres in the discussion continue to put you off, I’ll break it down.
A few weeks ago, I talked about Google and the third-party cookie situation. I defined what cookies mean and how it plays into personalized or tailored advertising for a targeted audience on digital channels.
As I said, the third-party cookie is a feature that has been addressed for years. But now Google has large market shares for web browsers, content/publishers AND search ads. Google is the key to the advertising industry.
So, about two months ago, Apple made a simple but extremely important change to the way podcasts are handled. Before the change, a subscriber who missed a week or two of a podcast would return to find that the app had downloaded all the missed episodes.
After the recent system update, Apple no longer downloads back-to-back episodes, causing many podcasts to lose about 25% of their downloads. Podcasters have had a collective meltdown. It’s a big deal for those who have monetized their podcasts through advertising, considering it’s a $2 billion industry.
Now imagine the impact is nearly 300 times greater. Programmatic advertising is a $546 billion industry. Google is about $230 billion of that, so this third-party cookie change is reaching a tectonic level. When Google removes third-party cookies, everyone in the business will see their ad performance take a huge hit. Publishers, media companies, the Interactive Advertising Bureau (IAB), and even tech companies have toxic freaks.
Google is smart, of course. It doesn’t just remove the third-party cookie. Besides, it also feeds their income. In 2019, Google basically said, “Hey, yeah, hey. We are fully committed to privacy and will start working on new solutions that do not include third-party cookies. We would like to work with you on this. Let’s shoot for — I don’t know, 2022?”
At the time, it launched what became known as the Google Privacy Sandbox — an “industry-wide effort to develop new technology that will improve people’s privacy on the web and apps.”
A flurry of possible cookie-free solutions
As Google began work in 2019, there were big discussions with groups like the IAB, which represent the affected industries, about how to do things. Delays followed. In 2021, Google said, “Okay, we get it. This is hard. Therefore, we will delay killing third-party cookies until 2023.”
Meanwhile, Google kept making things. Try new technologies. It was experimented with. Nobody in advertising and the media paid attention, or if they did, they didn’t like it. So Google again said, “Okay, we’re going to delay it. But let’s be serious – it’s 2024.”
In 2023, it released the solution to a cookie-free world — a cleanroom technology with vendor partners like Habu and LiveRamp. The idea would allow advertisers to match Google data with product company data. It created a data exchange called “Switzerland,” a neutral place to identify people to target with ads without either side giving up their identity. Google called this PAIR — Publisher Advertiser Identity Reconciliation.
To further confuse matters and extend the logic of the bingo acronym, Google also announced FLEDGE — First Locally Executed Decisions over Groups Experiment. It groups people into a set of content categories. The test found that Google’s category definitions performed similarly to those using third-party cookies. Fortunately, they changed the name to Protected Audience API and said, “Hey, this kind of works. So what do you say?”
Excited editors and others responded, “Me, I don’t get it.”
And that brings us to today.
A few weeks ago, Google made good on its promise. It introduced real change, limiting third-party cookies to 1% of Chrome browsers, and people weren’t happy.
Now, the news is that the IAB — that industry group that represents advertisers and publishers — has issued a report outlining all the things that are wrong with Google’s Privacy Sandbox approach, and why it’s not ready for prime time. . They cried: “What?! You are actually doing what you told us you would do five years ago!’
In their fury, they not-so-subtly tried to suggest that Google might not be transparent about how it does things. The Competition and Markets Authority in the UK accepted the baseless insinuation. It essentially said, “Google needs to do more to address the problems with the Privacy Sandbox because, well, because Google might be creating an advantage for Google in the way it’s architecting the sandbox.”
Shocking, right? Google can structure the next generation of ad targeting to give itself an advantage over everyone else.
Overcome third-party talk with a first-party solution
What does all this mean to you?
You’ll see similar headlines about third-party data fixes for a while. The thrashing will continue about standard ways to target ads. It is in everyone’s best interest to delay, obfuscate and make everything complicated about it. So don’t expect this to be resolved anytime soon.
But don’t use all of this as an excuse to hold back your business, your team or you from improving your first-party data approach – and using that data collected from your customers, website visitors, etc. to manage how you target content and create value for your desired audience and customers.
Whatever the outcome of this whole debacle is, it will fundamentally change the way advertising media is bought. Is not if it will change, but how much and what will change. I guarantee, no matter which solution ends up being the standard, it won’t be any easier to target content.
If you don’t have a first-party data strategy and a way to get a 360-degree view of your audience as they travel through your content experiences, your marketing and advertising will become much more expensive. I know that for sure.
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Cover image by Joseph Kalinowski/Content Marketing Institute
